Public Utility Division inquiry on prepaid metering services

Oklahoma Corporation Commission
http://www.occeweb.com/pu/Prepayment%20Project/Prepayment%20Research.html[10/5/2011 4:31:22 PM]
Public Utility Division Inquiry on Prepaid Metering
Services
In response to inquiries related to proposed Prepaid Metering pilot projects, programs
that could impact Oklahoma ratepayers, the Oklahoma Corporation Commission (OCC) is
providing forums for other State agencies, electric utilities, consumer groups and all
stakeholders to meet on the potential impacts and concerns related to Pre-paid metering
services. The Public Utility Division (PUD) is currently accepting and reviewing comments
and concerns from all interested stakeholders.
At this time, utility companies have the ability to offer prepaid meter service as long as
the program is compliant with all existing Commission Rules. Any variation from rules
requires a filed application and review by the Commission.
What is PrePaid Metering?
Prepaid metering offers the opportunity to pay for utility services before they are used.
You may pay when you want, and in the amounts you want. Instead of receiving a
traditional paper bill that is generated once each month, usage is calculated daily.
Prepaid customers never pay a late charge and generally are not charged costly
disconnect and reconnect fees if the account runs out of credit. The service also helps
customers avoid initial deposits should one be required for standard billing.
Important Dates:
May 23, 2011: The Public Utility Division posted a special meeting to discuss Prepaid
metering. All utilities and stakeholders were invited. Notice of Public Meeting
June 22, 2011: The Public Utility Division posted a second special meeting to
discuss Prepaid metering. All utilities and stakeholders were invited. Notice of Public
Meeting
Future Meetings will be determined at a later date. Please watch this site for
upcoming dates or use the form below to request to be added to the email
distribution list.
Important Documents and Links:
Common Questions Concerning Prepaid Metering
June 22, 2011 OGE Pilot Program Presentation
June 22,2011 Oklahoma Electric Cooperative Presentation
June 22, 2011 PSO Pilot Program Presentation
June 22, 2011 AARP Comments
OCC
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Oklahoma Corporation Commission
http://www.occeweb.com/pu/Prepayment%20Project/Prepayment%20Research.html[10/5/2011 4:31:22 PM]
OCC Street Address MAP
2101 North Lincoln Blvd.
Oklahoma City, OK 73105
OCC Mailing Address
P.O. Box 52000
Oklahoma City, OK 73152-2000
(405) 521-2211
Tulsa Office MAP
440 S. Houston Ave., Suite 114
Tulsa, OK 74127
(918) 581-2296
Oil and Gas District Offices
State of Oklahoma Web Site
Site map| Disclaimer
June 22, 2011 Comments from the Office of the Attorney General
May 23 2011 OGE Pilot Program Presentation
May 23, 2011 Oklahoma Association of Electric Cooperatives Presentation
May 23 2011 Oklahoma Electric Cooperative Presentation
May 23, 2011 Public Service Company Presentation
Related Links:
Lake Regional Electric Cooperative Prepaid Metering
For questions or to provide comments please use the form below
First name:
Last name:
E-mail address
Phone number:
Your comments:
Q&A for Prepay Website
Q: Will prepay service be optional for customers of all utilities offering the service?
A: Yes, any utility offering prepay service to its customers must make it optional on the part of
its customers.
Q: Will prepay options be available to customers with serious medical conditions requiring
electrically operating medical equipment?
A: No, these customers are prohibited from prepay option eligibility due to the possibility of
sudden power disconnection.
Q: Could service ever be disconnected during weather moratoriums?
A: Utility companies are bound by Commisssion rules. Current rules prohibit service
disconnections during weather moratoriums. Any variation from this or any other
Commission rule would require specific application for waiver and subsequent Commission
approval.
Q: Will prepay pilot programs be uniform for all utilities throughout the state?
A: Basic guidelines regarding consumer protections such as eligibility for “medical” customers
will be uniform for all regulated utilities in the state. However, each utility offering the
service may incorporate minor differences in application tailored to meet the distinct needs
and desires it perceives on the part of its particular customer base.
Q: Will the cost of the meters required for prepay service be borne only by those customers who
choose prepay service?
A: No, the increased cost of advanced metering will be borne by all customers of utility service
as those and similar costs are presently allocated through normal rate making methodologies
to all customers. Prepaid meter service is only one of the benefits of the required technology
upgrades.
Q: Are utility rates higher for prepay service than they are for post-paid service?
A: No, the rates the same as those for traditional billing service.
Q: Are deposits required for prepay service and are there fees to reconnect to prepay service?
A: At this time, the current programs do not require deposits to initiate service. This is one of
the potential benefits to the program that could allow more customers to initiate services
without the large initial investment. Reconnection fees will be reviewed as part of each
utilities’ proposed program. Currently, none of the programs charge a reconnection fee.
Q: Do prepay customers have access to deferred payment plans and arrearage management?
A: The utilities will work with any customer who is seriously trying to remain current on their
account and repay prior balances due for service.
Q: How/where can customers make payments to their prepay accounts?
A: There are currently multiple payment methods available to customers on prepay service
depending on the particular utility plan. These payment methods may include:
Mail in payments
Cash or check at utility office or authorized pay station
Cash or check at kiosk machines at various locations, i.e.,convenience stores, grocery
stores, utility offices, etc.
By phone with check or credit card and using 3rd party agent
3rd party agent services at multiple network locations nationwide
Automatic draft on debit card
Q: How long does it take a payment to be posted to an account?
A: Typically within 15 minutes of payment.
Q: Will customers be required to have an in-home display to be notified of low balances or
whether they are subject to disconnect for a zero or negative balance?
A: Customers will have a choice of communication methods, including:
E-mail
IVR
Text messaging
Websites
In-home displays
Pay-As-You-Go Pilot
June 22, 2011
Pay-As-You-Go Explanation
Essentially paying in advance for electricity
Allows for as many payments as necessary throughout
the month
Provides billing options and flexibility
Still have electricity while paying off past OG&E debts
% applied to usage; remaining % of pre-pay payment
applied toward arrears
Pilot Details
October 2011 through December 2012
660 customers
100% voluntary participation
Customer can unenroll and return to standard billing at
anytime
No disconnect/reconnect fees
No deposit requirements to participate
Rate assigned: 330 customers on time-of-use and 330
customers on standard
Pilot Eligibility
Residential customers only
Customer must have a remote-disconnect smart meter
Can’t be flagged as a life threatening customer
First come first served basis to participate (660
customers)
No past due balance greater than $500
Minimum activation amount $25 to establish service
Payment Process
Customer can use any existing payment methods
•Phone, kiosk, online
Customer selects notification methods from
OG&E
•Email, text message, phone
Notification sent at specified $ amount remaining
OG&E account is credited when payment made;
as electricity is consumed account is deducted
Customers can access remaining balance
anytime online or over the phone
Zero Account Balance Process
Notification sent at $0 amount remaining
•via customer selected notification method
No disconnections during weather moratoriums,
on weekends or holidays
Disconnection could occur Monday through
Thursday 8:00 a.m. to 2:30 p.m. and on Friday from
8:00 a.m. to noon.
Customer makes a payment of $25 at any time to
reestablish service
Prepay Billing vs. Prepay Metering
Existing metering infrastructure
No disconnect collars
No in-home device
Smart Meter Infrastructure
 Installation of 307,744 smart meters as of June
15, 2011
 Approximately 80% of smart meters have
remote connect and disconnect capability
 Installation of 100% smart meters in OG&E
service territory by December 31, 2012
Approved Tariff Language
On a limited basis, residential and small commercial customers
that are taking service where the supporting technology and
infrastructure are available may request to participate in the
Prepay Bill pilot. Customers are provided a meter (and other
technology) that will disconnect service if the prepaid amount
drops to zero. Customers can re-activate electric service by
adding funds to their account. The customer’s standard rate will
apply and will be prorated to a daily basis as required. No
reconnect or disconnect fees will apply. Customers under this
provision are not required to pay a deposit. Under this provision,
OG&E will not leave a paper copy of the notice of disconnection
at the premises.
Smart Meters:
OKLAHOMA ELECTRIC COOPERATIVE Providing Real Benefits Your Touchstone Energy Partner
Ne w Opportunities with Prepaid
Jonna Buck
Oklahoma Electric Cooperative
405-217-6634
jbuck@okcoop.org
eXceleron
Customer Benefits
'JL
OEC B
\our Ttihtone Encrgs Partner t
El 100% Smart Meters
• 8,853 Disconnect collars
1:1 Urban and Rural -- serving 5,000+
apartments and many other rental
units
O Began offering prepaid in 2006
• 10% participation
Challenges
El Consumer -
R High deposits
• Late fees/collection cost
1:1 Cooperative
U Rate payers bare the burc
CN" /, - -, \,
EjL
OKLAHOMA ELECTRIC COOPERATIVE
Your Touchstone Energy Partner
• 80/20 rule
U Delinquent customers rarely become
current -
OL
Prepaid B Cycle OKLAHOMA ELECTRIC COOPERATIVE
Your Touchstone Energy Partner
0 Empowers member
• Low start-up cost
• Saves money
• Puts member in control
0 Removes the Co-op from the cycle
• Provides alternative for CSRs
• Reduces write-offs
• Reduces collection time/money
Evaluating Alternatives OKlAHOMA ELECTRIC COOPERATIVE
Your Touchstone Energy Partner
El In-home device vs. software solution
Li Cost/maintenance
Risk equipment loss/damage
Notification Infrastructure needed
O Payment terminals
• Servicing cost
• Payment methods available
0 Accounting requirements
Implementation at OEC OKLAHOMA ELECTRIC COOPERATIVE
Your Touchstone Encrtv Part nur
0 60 day pilot
• Employees tested
1:1 Business rules established
U Disconnect collar
U What fees will be charged
U Payment minimums
U Disconnect schedule-weekends/holidays
U Rate structure
0 Voluntary/mandatory
Your Touchstone Energy Partner Customer E OKlAHOMA ELECTRIC COOPERATIVE
O Start with a credit ($ 2 5)
O Choose notification methods
U Email, SMS, IVR
O Daily bill calculated using previous
days usage
El Credit runs out-power goes off
El Payment received power comes on
• $10 plus balance
Prepaid vs. Postpaid
'ThT'\
OKLAHOMA ELECTRIC COOPERATIVE
Your Touchstone Energy Partner
O Requires rethinking all the "rules"
• Payments are smaller/more frequent
0 Average prepayment = $45
0 Some customers are not candidates
0 Disconnect is not "bad"
• Real-time data becomes critical
0 Disconnect M-F, Reconnect 24/7
0 Payments post w/in 15 minutes
Prepaid is Win-Win
Ton
OKLAHOMA ELECTRIC COOPERATIVE
Your Touchstone Energy Partner t
El Existing members benefit
• No more fees
0 Decreased staffing
• CS & Field
0 Improves morale
• Provides alternatives
El No paper bill
• Saves money/good for environment
Change in Write-offs
0.7-
0.6-
0.5-
0.4-
0.3
0.2-
0.1-
0 - -------
ff
6718118111
ISISII]
3000
2000
1000
Participants
Growth in Prepaid Participation
Participants
2006 2007 2008 2009 2010 2011
Prepaid Survey
/ThT,
OKLkHOMA ELECTRIC COOPERATIVE
Your Touchstone Energy Partner
Over
D Please indicate your overall satisfaction 85%
with OEC Prepaid:
D Would you recommend OEC Prepaid 880/0
to others?
Ye
O Do you feel you are more aware and/or
conservative of your use of electricity
on prepaid? (i
Yes
PSO Prepay Pilot Discussion
June 22, 2011
grdSMART
PUBLIC SERVICE
COMPANY OF
OKLAHOMA
PSO's Plan
• Pilot program to understand customer benefits and issues
• Voluntary program
• Customer takes control and has ownership/responsibility for electric use
• Based on similar programs/pilots, customers reduce electric use and customer satisfaction has increased
• Flat rate pilot tariff
- Easy for customers to understand and calculate purchase amounts
- Revenue requirements the same as residential tariff
• On a daily basis, use readings to compute use, validate the use and compute a remaining balance,
factoring in any new payments
- Minimum One day delay in disconnect once account reaches zero or negative
- Credit disconnects M-F (normal business hours) excluding weekends and holidays
- Reconnects 24/7
• Not suitable for all residential customers
- Medical alert
- Life Support
• Excluded from Weather Moratoriums
- Deposits waived
- Reconnect fees waived
• Credit arrangements for prior balances or deferred AMP balances.
- Propose customers with credit arrangement or AMP deferred balances be allowed to carry over a maximum amount
- 30% of each credit posted to account could apply to credit arrangement or AMP deferred balance
• Customers transition ing from pre-pay tariff
- At anytime
- Subject to a credit analysis and may have a deposit requirement
grdSMART
• PUBLIC SERVICE
COMPANY OF
OKLAHOMA
* 'II I
Rule Waivers
• Main rules from which waiver may be sought found in Subchapter 19:
Consumer Data, Deposits, and Billing and Subchapter 21:
Disconnection of Service
• 0AC165:35-19-30: Billing
- Prepay customers will not receive a standard bill
- Still exploring types and content of statements and methods for
delivery to keep customers apprised of rates of usage, etc.
• OAC 165:35-21-2(c)-(d) and 165:35-21-20: Notice of disconnection
- Depletion of funds results in disconnection
- Standard disconnection rules/notices do not apply
- Exploring notice timing and paperless methods including electronic
mail, voicemail, in-home device, web portal, etc.
- No disconnects on weekends/holidays
- Sufficient time the next business day to replenish funds and
immediate reconnection
grdSMART
• PUBLIC SERVICE
COMPANY OF
OKLAHOMA
I
Rule Waivers
. OAC 165:35-21-10: Delays to disconnection
- Customers with life-threatening conditions ineligible
Deferred or delayed payment options unavailable
Excluded from weather moratoriums
. OAC 165:35-21 -11: Notification procedure for elderly and/or
consumers with disabilities
- Customers who elect this special notification are ineligible for
prepay
• Other rules may require review and possible waiver as the program
is developed and implemented.
grdSMART
PUBLIC SERVICE
COMPANY OF
OKLAHOMA
to ilm , I "4'
June 27, 2011
ATTORNEY GENERAL’S CONCERNS REGARDING PREPAID
METERING FOR ELECTRIC SERVICE
• Does Prepaid Metering Discriminate Among Classes of Utility Consumers
• Prepaid metering is a “lesser” or more limited service that post-paid service
• Concerning IOUs, the monopolistic compact requires utility to provide service
without unreasonable discrimination
• Not a concern if prepaid metering is truly a voluntary decision on part
of consumer
• Are there sufficient procedural safeguards to protect prepaid metering
consumers’ state and federal due process rights
• Does Prepaid Metering Provide the Benefits Ascribed by Utilities
• Regarding claim that prepaid metering provide consumers greater control over
usage
• Two types of usage – discretionary and non-discretionary
• Non-discretionary is major block of usage and includes space heating,
water heating, and refrigeration
• These are mostly beyond the ability of low-income family to control (age
and efficiency of utilities, dwelling, and number of people at home during
day)
• Regarding claim that prepaid metering makes consumers more aware of energy
consumption and thereby promotes efficiency
• Presumes that all consumers have access to the meter (multi-family
dwelling may not)
• Presumes consumers have ability to translate the information from the
meter
• Presumes that consumers have the education and ability to make the
calculations necessary to plan future usage
• Prepaid Metering May Restrict Consumer Access to Other Budgeting Tools and Aid
• Prepaid metering consumers do not have access to levilized billing plans
• Consumers may not be able to rely on LIHEAP or other federal and state energy
assistance plans
• The time between application and receipt of aid is weeks and sometimes
months
• Do remote payment methods work with state or federal vouchers or
benefit forms
• The Lesser Service Associated with Prepaid Metering Supports Argument That
Utility Should Charge Less for Service
• Risk of bad debt is shifted from utility to consumer
• Consumer is not guaranteed full month of service as with postpaid service
• Meter reading and billing functions and associated costs are transferred from
utility to consumer
• Utility costs associated with notice and different billing plans are eliminated
• Does Prepaid Metering Represent the Most Cost-Effective Method of Addressing
Problem of Bad Debt, i.e., Is It the Least-Cost Alternative
• Have the utilities made any showing that the costs associated with prepaid
metering are outweighed by amounts collected
• Are there other alternatives, such as energy efficiency/weatherization programs,
that could lower bills and be more effective in addressing bad debt issues
What is Prepay Billing?
• Emerging market trend for electric utilities in the United
States
• Unique, customer-centric solution that is enhanced by
Smart Grid technology
• Easy, straightforward way for customers to purchase
electricity without an upfront deposit or costly
disconnect/reconnect fees
• Several potential technology options to support prepay
billing, including third party solutions or building the
systems internally
2
Existing Programs
• Oklahomans can opt for a prepay program if they are customers at
Lake Region Electric Cooperative, Oklahoma Electric Cooperative,
Central Rural, Indian Kiamichi, and Northwestern Electric
Cooperative
• Progress Energy is planning to implement a prepay pilot at the
end of 2011 or early 2012. Their pilot will run through April
2013.
– Their pilot will have approximately 1,000 North and South
Carolina customers participating
– Two hundred and fifty of those will be given an in-home
device.
• Salt River Project (SRP) has 17 years of experience with prepay
– Over 100,000 prepay customers
– 89% are very satisfied or satisfied with SRP’s prepay
– Consistent reduction in energy use by these customers
3
OG&E Customer Assessment
• OG&E research shows initial customer interest in
prepay, particularly among budget constrained
customers
• At an estimated 10% take rate, OG&E should be able to
serve approximately 65,000 customers on prepay over
the next 5 years
4
Prepay Tariff Language
• Following language filed at the Commission in PUD 2010-29:
– On a limited basis, residential and small commercial
customers that are taking service where the supporting
technology and infrastructure are available may request to
participate in the Prepay Bill pilot. Customers are provided
a meter (and other technology) that will disconnect service
if the prepaid amount drops to zero. Customers can re-activate
electric service by adding funds to their account.
The customer’s standard rate will apply and will be
prorated to a daily basis as required. No reconnect or
disconnect fees will apply. Customers under this provision
are not required to pay a deposit. Under this provision,
OG&E will not leave a paper copy of the notice of
disconnection at the premises.
5
Prepay Plan
• Develop pilot
• Implement pilot by 4th quarter of 2011
• Review results from pilot and if favorable, recommend
appropriate regulatory changes
• Implement tariff
6
OG&E Pilot Details
• Approximately 900 customers expected to participate
– 600 on prepay
– 300 in Control group
• Only residential customers will be included
– Commercial customers may be included during a
subsequent prepaid billing pilot program
• Customers will be assigned to either a TOU rate or the
standard rate
7
Expected Customer Benefits
• Customer benefits from prepay include paying for energy
as its used, eliminating surprises at the end of the
month, budget control, convenience/flexibility factor
• Itron whitepaper indicates prepay customers may use as
much as 15-20% less energy than conventional users
• Pilot will explore pairing prepay with a TOU rate to
potentially reduce peak demand
• Prepayment empowers customers to consume electricity
wisely
– Being able to pay in small, incremental payments in
advance shifts energy consumption to the forefront of
customers’ minds
8
Why the Oklahoma Association of
Electric Cooperatives Support…
PRE-PAID METERING
Customer-friendly extension of Smart Metering technology;
Can be customized for both large and small Cooperatives;
Provides both convenience and control to Co-op members;
Helps relieve financial pressure on local assisting agencies;
Assists Co-ops in reducing bad debt write-offs/collectibles;
Gives consumer-member an alternative to high deposits;
Allows for more conscientious and managed use of energy;
Helps eliminate fees for connects and disconnects; and,
Member choice of notification method: phone, text, e-mail.
Electric Co-ops & Pre-Paid Meters:
First used pre-pay
meters in early 1990s;
Initial devices were
‘in-home’ monitors;
‘Smart Meters’ now
give greater flexibility
for notifications;
9 of 25 self-regulated
Co-ops currently using
pre-pay meters (36%);
8 self-regulated Co-ops
planning to use (68%).
Co-ops have over 8,300
pre-paid meters in use;
Highest percentage of
pre-paid meter use is at
OEC in Norman: 4,600
accounts (9.43%);
3 regulated Co-ops not
able to offer pre-paid
meters at this time, but
would if OCC approves.
Charles Barton, CFO
Oklahoma Electric Cooperative
cbarton@okcoop.org
405-217-6701
Pre-Paid: The Tangible Benefit
of Smart Grid for Consumers
 100% AMI meters with 4,600 pre-paid (~10%);
 Ratepayers bear burden of bad debt;
 Delinquent accounts rarely become current;
 Pre-paid reduces anxiety over high bills;
 Pre-paid is not just for “problem” accounts;
 Less than 50% of OEC pre-paid accounts have been
disconnected.
Pre-Paid Background
2
Pre-Paid Member Benefits
 Empowers member:
 Chooses notification method: phone, text, email.
 Chooses when to be notified & the dollar minimum.
 Same payment choices/rates as post-paid;
 More manageable/easier budgeting:
 Easier to budget $50/week than $200/month.
 No deposits or reconnect fees;
 Builds awareness:
 Conserving kWh use by 13% on average.
3
Pre-Paid Co-op Benefits
 Removes the Co-op from the cycle:
 Provides alternative for CSRs;
 Reduces calls from angry members;
 Reduces write-offs;
 Reduces collection time/expense.
4
Pre-Paid is Win-Win
 Member benefit—more control of account:
 No late fees, disconnect fees or deposits;
 More energy conscious.
 Decreased staffing—CS & field personnel;
 No paper bill:
 Saves money & good for environment.
 Improved morale—members & employees;
 Promote pre-paid benefits for all accounts.
5
Pre-Paid Survey
 Please indicate your overall
satisfaction with OEC Pre-Paid:
 Would you recommend OEC
Pre-Paid to others?
 Do you feel you are more aware
and/or conservative of your use
of electricity on OEC Pre-Paid?
88%
Yes
Over
85%
positive
86%
Yes
6
PSO Prepay Pilot
Discussion
2
Technology
• Historically a prepay method required the control logic to
reside in the meter and customer to charge a card, at a
payment location, to populate the meter with a payment.
• New prepay method uses a smart meter with two way
communication. The prepay logic resides at a
centralized billing location, usually in the existing billing
system.
– Customers use existing payment channels
– Ability to send balance information via several communication
channels
– Lower cost solution to implement
– Able to provide instantly to customers
3
Proposal
• Offer only in the smart grid pilot area
• Submit Prepay pilot tariff (flat rate) in June
2011
• Offer voluntary pilot tariff First Quarter
2012
• Develop IT infrastructure to support, June
2011 to First Quarter 2012
4
Customer Benefits
�� Provides customers another choice
– Voluntary program
– Due to remote meter switch, customer would have expedient turn around
for credit reconnects
• Communication
– In home display equipment will be provided at no cost
– Additional communication mechanisms, Interactive Voice Response (IVR),
email, or website
– Monthly statement of payments and use
– May not require a deposit
• Existing deposits could be applied toward outstanding balances with the
remaining credit applied as an advanced payment
• Credit reconnect fee maybe waived
• Customer takes control and has ownership/responsibility for use
• Based on similar programs/pilots, customers reduce electric use and
customer satisfaction has increased
5
Calculation Process
• On a daily basis, use readings to compute use, validate the use and compute a
remaining balance, factoring in any new payments
• Notification provide by customer’s choice
– IVR, email, In Home Display (IHD), or website of estimated days remaining
– For example notification provided when 3 days and 1 day estimated use remain
– Notification sent when there is either a zero or negative balance
• Zero or negative balance notification sent, customer has until 8 am the next
day (approximately 1 day) to make a payment to establish a credit balance
• If by 8 am the next day an account remains negative a disconnect message
will be sent to the meter
– Credit disconnects between 8 am and 3:30 pm Monday to -Thursday and 8 am to
noon on Friday, same as other customers
– Excluding holidays, weekends, and weather moratoriums
• If the meter is disconnected for a negative credit
– Will be automatically connected at any time, once the balance is greater than zero
• The advanced payments are applied at the time they are received and the
actual advance payment balance is determined
6
Flat Rate Tariff
• Includes monthly customer charge, fuel
adjustment, and riders
• Easy for customers to understand and
calculate purchase amounts
• Revenue requirements the same as
residential tariff
7
Issues
• Pilot program to understand customer benefits and issues
• Not suitable for all residential customers
– Medical alert
– Life Support
• Weather moratoriums
– Same rules as existing customers?
– Eligible for immediate credit disconnect during normal periods after moratorium ends
• Billing for outdoor lights
– Create a daily rate or bill separately?
• Credit arrangements for prior balances or deferred AMP balances.
– Propose customers with credit arrangement or AMP deferred balances be allowed to carry over
– 30% of each credit posted to account could apply to credit arrangement or AMP deferred balance
• Customers transitioning from pre-pay tariff to another will be subject to a credit analysis
and may have a deposit requirement
• Handling/billing misc. charges
– Returned check fee, cut meter seal, etc
– Applied immediately to account
• Not eligible for automatic draft
– Banking regulations require a 10-day advance notice to the customer of the coming withdrawal
8
Rule Waivers
• Main rules from which waiver would be sought are found in Subchapter 19:
Consumer Data, Deposits, and Billing and Subchapter 21: Disconnection of
Service.
• Rule 165:35-19-30 requires utilities to issue customers bills at a prescribed time
interval and with prescribed information. The pre-pay customers will likely not
receive a standard bill, and PSO is still exploring types and content of statements
and methods for delivery to keep customers apprised of rates of usage, etc.
• Depletion of funds would result in disconnection, so the standard disconnection
rules/notices will not apply.
• With respect to 165:35-21-10 governing delays to disconnection, PSO will comply
with weather or Commission-ordered moratoriums, and customers with life-threatening
conditions would not be eligible for pre-pay. PSO does not otherwise
contemplate offering deferred or delayed payment options to pre-paid customers.
• With respect to 165:35-21-20 governing notice of disconnection, PSO is exploring
notice timing and paperless methods including electronic mail, voicemail, in-home
device, web portal, etc. Disconnects would not occur on weekends/holidays, there
should be sufficient time the next business day to replenish funds and virtually
immediate reconnection (within minutes) upon a positive balance should occur.
• Other rules may require review and possible waiver as the program is developed
and implemented.
Appendix
10
Prepay Messages - preliminary
Remaining Credit
262 kWh
8 days
2.4 kW 14 kWh today
40 kWh yesterday
11
Remaining Credit
56 kWh
Less than 3 days
2.4 kW 14 kWh today
40 kWh yesterday
Prepay Messages - preliminary
12
$30 payment received
July 11th. Thanks! $9
toward arrears. $21 =
215 kWh prepaid
------------------------------
201 kWh balance
Prepay Messages - preliminary
Lake Region Electric | Prepaid Metering
http://www.lrecok.coop/content.cfm?id=2057[10/12/2011 10:18:47 AM]
Are you a prepaid meter
subscriber?
Click here for your usage
information.
Prepaid Metering
Home \ Member Services \ Prepaid Metering
Would it be easier for you to make weekly or bi-weekly payments
rather than one large payment each month? If so, prepaid metering may be
for you.
What is Prepaid Metering?
Prepaid metering offers the opportunity to pay when you want, in the amounts you want.
Instead of receiving a traditional paper bill that is generated once each month, usage is
calculated daily. Prepaid customers never pay a late charge and are not charged costly
disconnect and reconnect fees if the account runs out of credit.
Is There a Deposit for Prepaid Service?
Prepaid customers are eligible to have their deposit waived or refunded and applied toward
your current energy costs. This puts your deposit money working for you NOW instead of
being held on your account to secure future service.
How Do I Know When My Balance Is Low?
Prepaid customers choose how they are notified when their balance is running low.
Notifications can be received via email, automated calling service, or text message. Each
prepaid customer chooses the balance at which they begin to receive notifications.
How Do I Make Payments?
Payments can be made in person, by telephone, or online.
How Do I Sign Up?
Just call Customer Service at (918) 772-2526 for details. You will be asked to have your
account current including any unbilled usage. For many customers, the deposit is enough to
cover these charges.
Copyright 2011, Lake Region Electric, 516 Lake Region Road, Hulbert OK 74441, 800-364-LREC | 918-772-2526
Lake Region Electric | Prepaid Metering
http://www.lrecok.coop/page_to_print.cfm?id=2057[10/12/2011 10:18:55 AM]
Prepaid Metering
Would it be easier for you to make weekly or bi-weekly payments rather than one large payment each
month? If so, prepaid metering may be for you.
What is Prepaid Metering?
Prepaid metering offers the opportunity to pay when you want, in the amounts you want. Instead of receiving a traditional
paper bill that is generated once each month, usage is calculated daily. Prepaid customers never pay a late charge and are
not charged costly disconnect and reconnect fees if the account runs out of credit.
Is There a Deposit for Prepaid Service?
Prepaid customers are eligible to have their deposit waived or refunded and applied toward your current energy costs. This
puts your deposit money working for you NOW instead of being held on your account to secure future service.
How Do I Know When My Balance Is Low?
Prepaid customers choose how they are notified when their balance is running low. Notifications can be received via email,
automated calling service, or text message. Each prepaid customer chooses the balance at which they begin to receive
notifications.
How Do I Make Payments?
Payments can be made in person, by telephone, or online.
How Do I Sign Up?
Just call Customer Service at (918) 772-2526 for details. You will be asked to have your account current including any
unbilled usage. For many customers, the deposit is enough to cover these charges.
Copyright 2011
Lake Region Electric, 516 Lake Region Road, Hulbert OK 74441, 800-364-LREC | 918-772-2526

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Oklahoma Corporation Commission
http://www.occeweb.com/pu/Prepayment%20Project/Prepayment%20Research.html[10/5/2011 4:31:22 PM]
Public Utility Division Inquiry on Prepaid Metering
Services
In response to inquiries related to proposed Prepaid Metering pilot projects, programs
that could impact Oklahoma ratepayers, the Oklahoma Corporation Commission (OCC) is
providing forums for other State agencies, electric utilities, consumer groups and all
stakeholders to meet on the potential impacts and concerns related to Pre-paid metering
services. The Public Utility Division (PUD) is currently accepting and reviewing comments
and concerns from all interested stakeholders.
At this time, utility companies have the ability to offer prepaid meter service as long as
the program is compliant with all existing Commission Rules. Any variation from rules
requires a filed application and review by the Commission.
What is PrePaid Metering?
Prepaid metering offers the opportunity to pay for utility services before they are used.
You may pay when you want, and in the amounts you want. Instead of receiving a
traditional paper bill that is generated once each month, usage is calculated daily.
Prepaid customers never pay a late charge and generally are not charged costly
disconnect and reconnect fees if the account runs out of credit. The service also helps
customers avoid initial deposits should one be required for standard billing.
Important Dates:
May 23, 2011: The Public Utility Division posted a special meeting to discuss Prepaid
metering. All utilities and stakeholders were invited. Notice of Public Meeting
June 22, 2011: The Public Utility Division posted a second special meeting to
discuss Prepaid metering. All utilities and stakeholders were invited. Notice of Public
Meeting
Future Meetings will be determined at a later date. Please watch this site for
upcoming dates or use the form below to request to be added to the email
distribution list.
Important Documents and Links:
Common Questions Concerning Prepaid Metering
June 22, 2011 OGE Pilot Program Presentation
June 22,2011 Oklahoma Electric Cooperative Presentation
June 22, 2011 PSO Pilot Program Presentation
June 22, 2011 AARP Comments
OCC
Home
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Agendas
Oklahoma Corporation Commission
http://www.occeweb.com/pu/Prepayment%20Project/Prepayment%20Research.html[10/5/2011 4:31:22 PM]
OCC Street Address MAP
2101 North Lincoln Blvd.
Oklahoma City, OK 73105
OCC Mailing Address
P.O. Box 52000
Oklahoma City, OK 73152-2000
(405) 521-2211
Tulsa Office MAP
440 S. Houston Ave., Suite 114
Tulsa, OK 74127
(918) 581-2296
Oil and Gas District Offices
State of Oklahoma Web Site
Site map| Disclaimer
June 22, 2011 Comments from the Office of the Attorney General
May 23 2011 OGE Pilot Program Presentation
May 23, 2011 Oklahoma Association of Electric Cooperatives Presentation
May 23 2011 Oklahoma Electric Cooperative Presentation
May 23, 2011 Public Service Company Presentation
Related Links:
Lake Regional Electric Cooperative Prepaid Metering
For questions or to provide comments please use the form below
First name:
Last name:
E-mail address
Phone number:
Your comments:
Q&A for Prepay Website
Q: Will prepay service be optional for customers of all utilities offering the service?
A: Yes, any utility offering prepay service to its customers must make it optional on the part of
its customers.
Q: Will prepay options be available to customers with serious medical conditions requiring
electrically operating medical equipment?
A: No, these customers are prohibited from prepay option eligibility due to the possibility of
sudden power disconnection.
Q: Could service ever be disconnected during weather moratoriums?
A: Utility companies are bound by Commisssion rules. Current rules prohibit service
disconnections during weather moratoriums. Any variation from this or any other
Commission rule would require specific application for waiver and subsequent Commission
approval.
Q: Will prepay pilot programs be uniform for all utilities throughout the state?
A: Basic guidelines regarding consumer protections such as eligibility for “medical” customers
will be uniform for all regulated utilities in the state. However, each utility offering the
service may incorporate minor differences in application tailored to meet the distinct needs
and desires it perceives on the part of its particular customer base.
Q: Will the cost of the meters required for prepay service be borne only by those customers who
choose prepay service?
A: No, the increased cost of advanced metering will be borne by all customers of utility service
as those and similar costs are presently allocated through normal rate making methodologies
to all customers. Prepaid meter service is only one of the benefits of the required technology
upgrades.
Q: Are utility rates higher for prepay service than they are for post-paid service?
A: No, the rates the same as those for traditional billing service.
Q: Are deposits required for prepay service and are there fees to reconnect to prepay service?
A: At this time, the current programs do not require deposits to initiate service. This is one of
the potential benefits to the program that could allow more customers to initiate services
without the large initial investment. Reconnection fees will be reviewed as part of each
utilities’ proposed program. Currently, none of the programs charge a reconnection fee.
Q: Do prepay customers have access to deferred payment plans and arrearage management?
A: The utilities will work with any customer who is seriously trying to remain current on their
account and repay prior balances due for service.
Q: How/where can customers make payments to their prepay accounts?
A: There are currently multiple payment methods available to customers on prepay service
depending on the particular utility plan. These payment methods may include:
Mail in payments
Cash or check at utility office or authorized pay station
Cash or check at kiosk machines at various locations, i.e.,convenience stores, grocery
stores, utility offices, etc.
By phone with check or credit card and using 3rd party agent
3rd party agent services at multiple network locations nationwide
Automatic draft on debit card
Q: How long does it take a payment to be posted to an account?
A: Typically within 15 minutes of payment.
Q: Will customers be required to have an in-home display to be notified of low balances or
whether they are subject to disconnect for a zero or negative balance?
A: Customers will have a choice of communication methods, including:
E-mail
IVR
Text messaging
Websites
In-home displays
Pay-As-You-Go Pilot
June 22, 2011
Pay-As-You-Go Explanation
Essentially paying in advance for electricity
Allows for as many payments as necessary throughout
the month
Provides billing options and flexibility
Still have electricity while paying off past OG&E debts
% applied to usage; remaining % of pre-pay payment
applied toward arrears
Pilot Details
October 2011 through December 2012
660 customers
100% voluntary participation
Customer can unenroll and return to standard billing at
anytime
No disconnect/reconnect fees
No deposit requirements to participate
Rate assigned: 330 customers on time-of-use and 330
customers on standard
Pilot Eligibility
Residential customers only
Customer must have a remote-disconnect smart meter
Can’t be flagged as a life threatening customer
First come first served basis to participate (660
customers)
No past due balance greater than $500
Minimum activation amount $25 to establish service
Payment Process
Customer can use any existing payment methods
•Phone, kiosk, online
Customer selects notification methods from
OG&E
•Email, text message, phone
Notification sent at specified $ amount remaining
OG&E account is credited when payment made;
as electricity is consumed account is deducted
Customers can access remaining balance
anytime online or over the phone
Zero Account Balance Process
Notification sent at $0 amount remaining
•via customer selected notification method
No disconnections during weather moratoriums,
on weekends or holidays
Disconnection could occur Monday through
Thursday 8:00 a.m. to 2:30 p.m. and on Friday from
8:00 a.m. to noon.
Customer makes a payment of $25 at any time to
reestablish service
Prepay Billing vs. Prepay Metering
Existing metering infrastructure
No disconnect collars
No in-home device
Smart Meter Infrastructure
 Installation of 307,744 smart meters as of June
15, 2011
 Approximately 80% of smart meters have
remote connect and disconnect capability
 Installation of 100% smart meters in OG&E
service territory by December 31, 2012
Approved Tariff Language
On a limited basis, residential and small commercial customers
that are taking service where the supporting technology and
infrastructure are available may request to participate in the
Prepay Bill pilot. Customers are provided a meter (and other
technology) that will disconnect service if the prepaid amount
drops to zero. Customers can re-activate electric service by
adding funds to their account. The customer’s standard rate will
apply and will be prorated to a daily basis as required. No
reconnect or disconnect fees will apply. Customers under this
provision are not required to pay a deposit. Under this provision,
OG&E will not leave a paper copy of the notice of disconnection
at the premises.
Smart Meters:
OKLAHOMA ELECTRIC COOPERATIVE Providing Real Benefits Your Touchstone Energy Partner
Ne w Opportunities with Prepaid
Jonna Buck
Oklahoma Electric Cooperative
405-217-6634
jbuck@okcoop.org
eXceleron
Customer Benefits
'JL
OEC B
\our Ttihtone Encrgs Partner t
El 100% Smart Meters
• 8,853 Disconnect collars
1:1 Urban and Rural -- serving 5,000+
apartments and many other rental
units
O Began offering prepaid in 2006
• 10% participation
Challenges
El Consumer -
R High deposits
• Late fees/collection cost
1:1 Cooperative
U Rate payers bare the burc
CN" /, - -, \,
EjL
OKLAHOMA ELECTRIC COOPERATIVE
Your Touchstone Energy Partner
• 80/20 rule
U Delinquent customers rarely become
current -
OL
Prepaid B Cycle OKLAHOMA ELECTRIC COOPERATIVE
Your Touchstone Energy Partner
0 Empowers member
• Low start-up cost
• Saves money
• Puts member in control
0 Removes the Co-op from the cycle
• Provides alternative for CSRs
• Reduces write-offs
• Reduces collection time/money
Evaluating Alternatives OKlAHOMA ELECTRIC COOPERATIVE
Your Touchstone Energy Partner
El In-home device vs. software solution
Li Cost/maintenance
Risk equipment loss/damage
Notification Infrastructure needed
O Payment terminals
• Servicing cost
• Payment methods available
0 Accounting requirements
Implementation at OEC OKLAHOMA ELECTRIC COOPERATIVE
Your Touchstone Encrtv Part nur
0 60 day pilot
• Employees tested
1:1 Business rules established
U Disconnect collar
U What fees will be charged
U Payment minimums
U Disconnect schedule-weekends/holidays
U Rate structure
0 Voluntary/mandatory
Your Touchstone Energy Partner Customer E OKlAHOMA ELECTRIC COOPERATIVE
O Start with a credit ($ 2 5)
O Choose notification methods
U Email, SMS, IVR
O Daily bill calculated using previous
days usage
El Credit runs out-power goes off
El Payment received power comes on
• $10 plus balance
Prepaid vs. Postpaid
'ThT'\
OKLAHOMA ELECTRIC COOPERATIVE
Your Touchstone Energy Partner
O Requires rethinking all the "rules"
• Payments are smaller/more frequent
0 Average prepayment = $45
0 Some customers are not candidates
0 Disconnect is not "bad"
• Real-time data becomes critical
0 Disconnect M-F, Reconnect 24/7
0 Payments post w/in 15 minutes
Prepaid is Win-Win
Ton
OKLAHOMA ELECTRIC COOPERATIVE
Your Touchstone Energy Partner t
El Existing members benefit
• No more fees
0 Decreased staffing
• CS & Field
0 Improves morale
• Provides alternatives
El No paper bill
• Saves money/good for environment
Change in Write-offs
0.7-
0.6-
0.5-
0.4-
0.3
0.2-
0.1-
0 - -------
ff
6718118111
ISISII]
3000
2000
1000
Participants
Growth in Prepaid Participation
Participants
2006 2007 2008 2009 2010 2011
Prepaid Survey
/ThT,
OKLkHOMA ELECTRIC COOPERATIVE
Your Touchstone Energy Partner
Over
D Please indicate your overall satisfaction 85%
with OEC Prepaid:
D Would you recommend OEC Prepaid 880/0
to others?
Ye
O Do you feel you are more aware and/or
conservative of your use of electricity
on prepaid? (i
Yes
PSO Prepay Pilot Discussion
June 22, 2011
grdSMART
PUBLIC SERVICE
COMPANY OF
OKLAHOMA
PSO's Plan
• Pilot program to understand customer benefits and issues
• Voluntary program
• Customer takes control and has ownership/responsibility for electric use
• Based on similar programs/pilots, customers reduce electric use and customer satisfaction has increased
• Flat rate pilot tariff
- Easy for customers to understand and calculate purchase amounts
- Revenue requirements the same as residential tariff
• On a daily basis, use readings to compute use, validate the use and compute a remaining balance,
factoring in any new payments
- Minimum One day delay in disconnect once account reaches zero or negative
- Credit disconnects M-F (normal business hours) excluding weekends and holidays
- Reconnects 24/7
• Not suitable for all residential customers
- Medical alert
- Life Support
• Excluded from Weather Moratoriums
- Deposits waived
- Reconnect fees waived
• Credit arrangements for prior balances or deferred AMP balances.
- Propose customers with credit arrangement or AMP deferred balances be allowed to carry over a maximum amount
- 30% of each credit posted to account could apply to credit arrangement or AMP deferred balance
• Customers transition ing from pre-pay tariff
- At anytime
- Subject to a credit analysis and may have a deposit requirement
grdSMART
• PUBLIC SERVICE
COMPANY OF
OKLAHOMA
* 'II I
Rule Waivers
• Main rules from which waiver may be sought found in Subchapter 19:
Consumer Data, Deposits, and Billing and Subchapter 21:
Disconnection of Service
• 0AC165:35-19-30: Billing
- Prepay customers will not receive a standard bill
- Still exploring types and content of statements and methods for
delivery to keep customers apprised of rates of usage, etc.
• OAC 165:35-21-2(c)-(d) and 165:35-21-20: Notice of disconnection
- Depletion of funds results in disconnection
- Standard disconnection rules/notices do not apply
- Exploring notice timing and paperless methods including electronic
mail, voicemail, in-home device, web portal, etc.
- No disconnects on weekends/holidays
- Sufficient time the next business day to replenish funds and
immediate reconnection
grdSMART
• PUBLIC SERVICE
COMPANY OF
OKLAHOMA
I
Rule Waivers
. OAC 165:35-21-10: Delays to disconnection
- Customers with life-threatening conditions ineligible
Deferred or delayed payment options unavailable
Excluded from weather moratoriums
. OAC 165:35-21 -11: Notification procedure for elderly and/or
consumers with disabilities
- Customers who elect this special notification are ineligible for
prepay
• Other rules may require review and possible waiver as the program
is developed and implemented.
grdSMART
PUBLIC SERVICE
COMPANY OF
OKLAHOMA
to ilm , I "4'
June 27, 2011
ATTORNEY GENERAL’S CONCERNS REGARDING PREPAID
METERING FOR ELECTRIC SERVICE
• Does Prepaid Metering Discriminate Among Classes of Utility Consumers
• Prepaid metering is a “lesser” or more limited service that post-paid service
• Concerning IOUs, the monopolistic compact requires utility to provide service
without unreasonable discrimination
• Not a concern if prepaid metering is truly a voluntary decision on part
of consumer
• Are there sufficient procedural safeguards to protect prepaid metering
consumers’ state and federal due process rights
• Does Prepaid Metering Provide the Benefits Ascribed by Utilities
• Regarding claim that prepaid metering provide consumers greater control over
usage
• Two types of usage – discretionary and non-discretionary
• Non-discretionary is major block of usage and includes space heating,
water heating, and refrigeration
• These are mostly beyond the ability of low-income family to control (age
and efficiency of utilities, dwelling, and number of people at home during
day)
• Regarding claim that prepaid metering makes consumers more aware of energy
consumption and thereby promotes efficiency
• Presumes that all consumers have access to the meter (multi-family
dwelling may not)
• Presumes consumers have ability to translate the information from the
meter
• Presumes that consumers have the education and ability to make the
calculations necessary to plan future usage
• Prepaid Metering May Restrict Consumer Access to Other Budgeting Tools and Aid
• Prepaid metering consumers do not have access to levilized billing plans
• Consumers may not be able to rely on LIHEAP or other federal and state energy
assistance plans
• The time between application and receipt of aid is weeks and sometimes
months
• Do remote payment methods work with state or federal vouchers or
benefit forms
• The Lesser Service Associated with Prepaid Metering Supports Argument That
Utility Should Charge Less for Service
• Risk of bad debt is shifted from utility to consumer
• Consumer is not guaranteed full month of service as with postpaid service
• Meter reading and billing functions and associated costs are transferred from
utility to consumer
• Utility costs associated with notice and different billing plans are eliminated
• Does Prepaid Metering Represent the Most Cost-Effective Method of Addressing
Problem of Bad Debt, i.e., Is It the Least-Cost Alternative
• Have the utilities made any showing that the costs associated with prepaid
metering are outweighed by amounts collected
• Are there other alternatives, such as energy efficiency/weatherization programs,
that could lower bills and be more effective in addressing bad debt issues
What is Prepay Billing?
• Emerging market trend for electric utilities in the United
States
• Unique, customer-centric solution that is enhanced by
Smart Grid technology
• Easy, straightforward way for customers to purchase
electricity without an upfront deposit or costly
disconnect/reconnect fees
• Several potential technology options to support prepay
billing, including third party solutions or building the
systems internally
2
Existing Programs
• Oklahomans can opt for a prepay program if they are customers at
Lake Region Electric Cooperative, Oklahoma Electric Cooperative,
Central Rural, Indian Kiamichi, and Northwestern Electric
Cooperative
• Progress Energy is planning to implement a prepay pilot at the
end of 2011 or early 2012. Their pilot will run through April
2013.
– Their pilot will have approximately 1,000 North and South
Carolina customers participating
– Two hundred and fifty of those will be given an in-home
device.
• Salt River Project (SRP) has 17 years of experience with prepay
– Over 100,000 prepay customers
– 89% are very satisfied or satisfied with SRP’s prepay
– Consistent reduction in energy use by these customers
3
OG&E Customer Assessment
• OG&E research shows initial customer interest in
prepay, particularly among budget constrained
customers
• At an estimated 10% take rate, OG&E should be able to
serve approximately 65,000 customers on prepay over
the next 5 years
4
Prepay Tariff Language
• Following language filed at the Commission in PUD 2010-29:
– On a limited basis, residential and small commercial
customers that are taking service where the supporting
technology and infrastructure are available may request to
participate in the Prepay Bill pilot. Customers are provided
a meter (and other technology) that will disconnect service
if the prepaid amount drops to zero. Customers can re-activate
electric service by adding funds to their account.
The customer’s standard rate will apply and will be
prorated to a daily basis as required. No reconnect or
disconnect fees will apply. Customers under this provision
are not required to pay a deposit. Under this provision,
OG&E will not leave a paper copy of the notice of
disconnection at the premises.
5
Prepay Plan
• Develop pilot
• Implement pilot by 4th quarter of 2011
• Review results from pilot and if favorable, recommend
appropriate regulatory changes
• Implement tariff
6
OG&E Pilot Details
• Approximately 900 customers expected to participate
– 600 on prepay
– 300 in Control group
• Only residential customers will be included
– Commercial customers may be included during a
subsequent prepaid billing pilot program
• Customers will be assigned to either a TOU rate or the
standard rate
7
Expected Customer Benefits
• Customer benefits from prepay include paying for energy
as its used, eliminating surprises at the end of the
month, budget control, convenience/flexibility factor
• Itron whitepaper indicates prepay customers may use as
much as 15-20% less energy than conventional users
• Pilot will explore pairing prepay with a TOU rate to
potentially reduce peak demand
• Prepayment empowers customers to consume electricity
wisely
– Being able to pay in small, incremental payments in
advance shifts energy consumption to the forefront of
customers’ minds
8
Why the Oklahoma Association of
Electric Cooperatives Support…
PRE-PAID METERING
Customer-friendly extension of Smart Metering technology;
Can be customized for both large and small Cooperatives;
Provides both convenience and control to Co-op members;
Helps relieve financial pressure on local assisting agencies;
Assists Co-ops in reducing bad debt write-offs/collectibles;
Gives consumer-member an alternative to high deposits;
Allows for more conscientious and managed use of energy;
Helps eliminate fees for connects and disconnects; and,
Member choice of notification method: phone, text, e-mail.
Electric Co-ops & Pre-Paid Meters:
First used pre-pay
meters in early 1990s;
Initial devices were
‘in-home’ monitors;
‘Smart Meters’ now
give greater flexibility
for notifications;
9 of 25 self-regulated
Co-ops currently using
pre-pay meters (36%);
8 self-regulated Co-ops
planning to use (68%).
Co-ops have over 8,300
pre-paid meters in use;
Highest percentage of
pre-paid meter use is at
OEC in Norman: 4,600
accounts (9.43%);
3 regulated Co-ops not
able to offer pre-paid
meters at this time, but
would if OCC approves.
Charles Barton, CFO
Oklahoma Electric Cooperative
cbarton@okcoop.org
405-217-6701
Pre-Paid: The Tangible Benefit
of Smart Grid for Consumers
 100% AMI meters with 4,600 pre-paid (~10%);
 Ratepayers bear burden of bad debt;
 Delinquent accounts rarely become current;
 Pre-paid reduces anxiety over high bills;
 Pre-paid is not just for “problem” accounts;
 Less than 50% of OEC pre-paid accounts have been
disconnected.
Pre-Paid Background
2
Pre-Paid Member Benefits
 Empowers member:
 Chooses notification method: phone, text, email.
 Chooses when to be notified & the dollar minimum.
 Same payment choices/rates as post-paid;
 More manageable/easier budgeting:
 Easier to budget $50/week than $200/month.
 No deposits or reconnect fees;
 Builds awareness:
 Conserving kWh use by 13% on average.
3
Pre-Paid Co-op Benefits
 Removes the Co-op from the cycle:
 Provides alternative for CSRs;
 Reduces calls from angry members;
 Reduces write-offs;
 Reduces collection time/expense.
4
Pre-Paid is Win-Win
 Member benefit—more control of account:
 No late fees, disconnect fees or deposits;
 More energy conscious.
 Decreased staffing—CS & field personnel;
 No paper bill:
 Saves money & good for environment.
 Improved morale—members & employees;
 Promote pre-paid benefits for all accounts.
5
Pre-Paid Survey
 Please indicate your overall
satisfaction with OEC Pre-Paid:
 Would you recommend OEC
Pre-Paid to others?
 Do you feel you are more aware
and/or conservative of your use
of electricity on OEC Pre-Paid?
88%
Yes
Over
85%
positive
86%
Yes
6
PSO Prepay Pilot
Discussion
2
Technology
• Historically a prepay method required the control logic to
reside in the meter and customer to charge a card, at a
payment location, to populate the meter with a payment.
• New prepay method uses a smart meter with two way
communication. The prepay logic resides at a
centralized billing location, usually in the existing billing
system.
– Customers use existing payment channels
– Ability to send balance information via several communication
channels
– Lower cost solution to implement
– Able to provide instantly to customers
3
Proposal
• Offer only in the smart grid pilot area
• Submit Prepay pilot tariff (flat rate) in June
2011
• Offer voluntary pilot tariff First Quarter
2012
• Develop IT infrastructure to support, June
2011 to First Quarter 2012
4
Customer Benefits
�� Provides customers another choice
– Voluntary program
– Due to remote meter switch, customer would have expedient turn around
for credit reconnects
• Communication
– In home display equipment will be provided at no cost
– Additional communication mechanisms, Interactive Voice Response (IVR),
email, or website
– Monthly statement of payments and use
– May not require a deposit
• Existing deposits could be applied toward outstanding balances with the
remaining credit applied as an advanced payment
• Credit reconnect fee maybe waived
• Customer takes control and has ownership/responsibility for use
• Based on similar programs/pilots, customers reduce electric use and
customer satisfaction has increased
5
Calculation Process
• On a daily basis, use readings to compute use, validate the use and compute a
remaining balance, factoring in any new payments
• Notification provide by customer’s choice
– IVR, email, In Home Display (IHD), or website of estimated days remaining
– For example notification provided when 3 days and 1 day estimated use remain
– Notification sent when there is either a zero or negative balance
• Zero or negative balance notification sent, customer has until 8 am the next
day (approximately 1 day) to make a payment to establish a credit balance
• If by 8 am the next day an account remains negative a disconnect message
will be sent to the meter
– Credit disconnects between 8 am and 3:30 pm Monday to -Thursday and 8 am to
noon on Friday, same as other customers
– Excluding holidays, weekends, and weather moratoriums
• If the meter is disconnected for a negative credit
– Will be automatically connected at any time, once the balance is greater than zero
• The advanced payments are applied at the time they are received and the
actual advance payment balance is determined
6
Flat Rate Tariff
• Includes monthly customer charge, fuel
adjustment, and riders
• Easy for customers to understand and
calculate purchase amounts
• Revenue requirements the same as
residential tariff
7
Issues
• Pilot program to understand customer benefits and issues
• Not suitable for all residential customers
– Medical alert
– Life Support
• Weather moratoriums
– Same rules as existing customers?
– Eligible for immediate credit disconnect during normal periods after moratorium ends
• Billing for outdoor lights
– Create a daily rate or bill separately?
• Credit arrangements for prior balances or deferred AMP balances.
– Propose customers with credit arrangement or AMP deferred balances be allowed to carry over
– 30% of each credit posted to account could apply to credit arrangement or AMP deferred balance
• Customers transitioning from pre-pay tariff to another will be subject to a credit analysis
and may have a deposit requirement
• Handling/billing misc. charges
– Returned check fee, cut meter seal, etc
– Applied immediately to account
• Not eligible for automatic draft
– Banking regulations require a 10-day advance notice to the customer of the coming withdrawal
8
Rule Waivers
• Main rules from which waiver would be sought are found in Subchapter 19:
Consumer Data, Deposits, and Billing and Subchapter 21: Disconnection of
Service.
• Rule 165:35-19-30 requires utilities to issue customers bills at a prescribed time
interval and with prescribed information. The pre-pay customers will likely not
receive a standard bill, and PSO is still exploring types and content of statements
and methods for delivery to keep customers apprised of rates of usage, etc.
• Depletion of funds would result in disconnection, so the standard disconnection
rules/notices will not apply.
• With respect to 165:35-21-10 governing delays to disconnection, PSO will comply
with weather or Commission-ordered moratoriums, and customers with life-threatening
conditions would not be eligible for pre-pay. PSO does not otherwise
contemplate offering deferred or delayed payment options to pre-paid customers.
• With respect to 165:35-21-20 governing notice of disconnection, PSO is exploring
notice timing and paperless methods including electronic mail, voicemail, in-home
device, web portal, etc. Disconnects would not occur on weekends/holidays, there
should be sufficient time the next business day to replenish funds and virtually
immediate reconnection (within minutes) upon a positive balance should occur.
• Other rules may require review and possible waiver as the program is developed
and implemented.
Appendix
10
Prepay Messages - preliminary
Remaining Credit
262 kWh
8 days
2.4 kW 14 kWh today
40 kWh yesterday
11
Remaining Credit
56 kWh
Less than 3 days
2.4 kW 14 kWh today
40 kWh yesterday
Prepay Messages - preliminary
12
$30 payment received
July 11th. Thanks! $9
toward arrears. $21 =
215 kWh prepaid
------------------------------
201 kWh balance
Prepay Messages - preliminary
Lake Region Electric | Prepaid Metering
http://www.lrecok.coop/content.cfm?id=2057[10/12/2011 10:18:47 AM]
Are you a prepaid meter
subscriber?
Click here for your usage
information.
Prepaid Metering
Home \ Member Services \ Prepaid Metering
Would it be easier for you to make weekly or bi-weekly payments
rather than one large payment each month? If so, prepaid metering may be
for you.
What is Prepaid Metering?
Prepaid metering offers the opportunity to pay when you want, in the amounts you want.
Instead of receiving a traditional paper bill that is generated once each month, usage is
calculated daily. Prepaid customers never pay a late charge and are not charged costly
disconnect and reconnect fees if the account runs out of credit.
Is There a Deposit for Prepaid Service?
Prepaid customers are eligible to have their deposit waived or refunded and applied toward
your current energy costs. This puts your deposit money working for you NOW instead of
being held on your account to secure future service.
How Do I Know When My Balance Is Low?
Prepaid customers choose how they are notified when their balance is running low.
Notifications can be received via email, automated calling service, or text message. Each
prepaid customer chooses the balance at which they begin to receive notifications.
How Do I Make Payments?
Payments can be made in person, by telephone, or online.
How Do I Sign Up?
Just call Customer Service at (918) 772-2526 for details. You will be asked to have your
account current including any unbilled usage. For many customers, the deposit is enough to
cover these charges.
Copyright 2011, Lake Region Electric, 516 Lake Region Road, Hulbert OK 74441, 800-364-LREC | 918-772-2526
Lake Region Electric | Prepaid Metering
http://www.lrecok.coop/page_to_print.cfm?id=2057[10/12/2011 10:18:55 AM]
Prepaid Metering
Would it be easier for you to make weekly or bi-weekly payments rather than one large payment each
month? If so, prepaid metering may be for you.
What is Prepaid Metering?
Prepaid metering offers the opportunity to pay when you want, in the amounts you want. Instead of receiving a traditional
paper bill that is generated once each month, usage is calculated daily. Prepaid customers never pay a late charge and are
not charged costly disconnect and reconnect fees if the account runs out of credit.
Is There a Deposit for Prepaid Service?
Prepaid customers are eligible to have their deposit waived or refunded and applied toward your current energy costs. This
puts your deposit money working for you NOW instead of being held on your account to secure future service.
How Do I Know When My Balance Is Low?
Prepaid customers choose how they are notified when their balance is running low. Notifications can be received via email,
automated calling service, or text message. Each prepaid customer chooses the balance at which they begin to receive
notifications.
How Do I Make Payments?
Payments can be made in person, by telephone, or online.
How Do I Sign Up?
Just call Customer Service at (918) 772-2526 for details. You will be asked to have your account current including any
unbilled usage. For many customers, the deposit is enough to cover these charges.
Copyright 2011
Lake Region Electric, 516 Lake Region Road, Hulbert OK 74441, 800-364-LREC | 918-772-2526